Know your competition. Whether you are playing a baseball game, building a business or trying to please your clients, knowing your competition is an essential key to success. In the spa industry, many owners, managers and professionals are spending too much time competing against each other. Instead, it’s time to join hands and marketing brains while banding together to take on the true competition—big-box stores selling over-the-counter skin care. Too many people in the industry are letting the mainstream media and marketing executives tell the story of professional skin care, and they are sending a misleading message that consumers can achieve the same or better results from an over-the-counter skin care product compared to a spa product.

Case in point, one over-the-counter line has recently introduced an expensive, high-end product to be sold in big-box stores, positioning it as an alternative to dermatologist-prescribed product offerings. However, it forgot to include one important value in the pricing: the guidance of a licensed, trained professional. This is where the spa industry can soar.

The opportunity is immense for spas to develop brand loyalty by fulfilling clients’ desires for long-lasting results through professional guidance. Spas already have a viable and loyal audience at their doorsteps. Statistics from the International SPA Association (ISPA) show one in four Americans have been to a spa, and there are more than 32 million active spa-goers. They are coming through your doors regularly. You are touching them, and yet allowing them to walk out the door empty-handed, leaving your clients to buy products elsewhere.

How do you educate and instill in clients’ minds that every time you touch them you are there as a professional to guide them through their important lifestyle and skin care choices? It’s all in the training. Give your staff a new vernacular, one unified message to send. And teach them to listen.
Share the knowledge

Spa owners, managers and estheticians have to tell the story and share the knowledge—it’s absolutely your responsibility as a spa professional. You are the people with the essential licenses, training and expertise. When consumers are provided with good information, they will make wise choices. This means, as a spa industry leader, you have the awesome responsibility of keeping your staff up to speed on the latest developments, products and their benefits, and in turn, the best ways to communicate this knowledge consistently and accurately to clients.

Nearly every spa professional educates on what products they use. For example, an esthetician may explain to a client why vitamin C is great for the skin, then simply let them leave without purchasing a vitamin Cproduct. The client then goes to her neighbor-hood drug or big-box store, reads a few labels and buys something with vitamin C in it. Most likely, the product—as well as the money and time spent—will disappoint her. This was the spa’s mistake. The esthetician educated the client, but she didn’t take that education to the next step by leading the client toward an effective product purchase.

Think of it this way: Treatments, products and guidance should be viewed as one seamless education experience for your clients. In one visit, this one-stop shopping mentality enables clients to receive the proper service, products, education and guidance to keep their skin maintenance and care going at home.
Putting the big-box theory to the test

With every dollar counting right now, you need to help your clients make educated decisions. Understand it is more cost-effective for clients to buy a product they can use for six months with great results than spending a little less, using the product for two weeks and then throwing it away because they don’t know how to use it.

Spa professionals owe it to their clients to share this knowledge and empower them to make the right decisions. When they end up at a big-box store, who’s there to prescribe the best products for their skin type? Who’s telling them what they do and don’t need? Honestly, besides the kid who’s standing behind the checkout counter, do customers even have the opportunity to talk with another human being during this process, which can directly affect their health and self-esteem?

Think of how cost-effective it is to have a professional recommendation with each product. When you help a client, consider that the coaching and professional recommendation is essentially free, and your client has the opportunity to better understand professional products are not more expensive than those found at drugstores and big-box stores.

Again, those outlets are your real competition—not other spa professionals. Focus your energy on figuring out how to educate clients on the benefit of a professional recommendation.
Learning to listen

Almost all spa professionals have likely witnessed firsthand the value of listening to clients. The power of the professional recommendation in the eyes of the client is enormous. These women and men look to personal trainers, life coaches, supervised weight loss programs and various support groups to master lifestyle changes that would lead to long-lasting, visible results. They value the training, tips, techniques, product suggestions and, most importantly, the consistent moral support they received from these professionals, and they credit these experts with encouraging them to stick with a program long enough to see results. With all of the knowledge and wonderful advice you share, it’s also important to take time to listen. Your clients are your best source of knowledge.

Spa professionals have many gifts for clients. These gifts are built by using education to help people achieve amazing skin, improved self-esteem and a healthier lifestyle. Only the spa community has the knowledge and personal connections to create these life-changing gifts and priceless. Embrace that responsibility and share your wealth of knowledge with clients today.

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Spa Business, Spa Business Plan, Spa Management Training, Spa Professionals, Spa Training Add new tag, Build Spa Brand, Spa competition

Hotel spas have long been a haven of calm for business travelers seeking to get the kinks out of their backs after a long flight or to unwind before a big meeting. But as the economic downturn hurts the hotel business, the spas are dealing with their own stresses.

According to PKF Consulting, spa revenue rose 5 percent from 2006 to 2007, largely because of higher charges for treatments. But since last fall, hotel spas have been dealing with both reduced occupancy and guests who have sharply curbed their discretionary spending.

PKF’s report on the outlook for hotel spas projected decreased attendance for 2009. To counteract this, hotel spa operators are trying several approaches to increase business and cut costs.

The spas are looking outside their hotels to cultivate a local and regional clientele. “Resort spas in particular are trying to attract more drive-in traffic,” said Lynne McNees, president of the International Spa Association. “We’ve seen a lot of resort and destination spas opening up their doors for day guests.”

Hotels like the Ginn Hammock Beach Resort in Palm Coast, Fla., the MGM Grand Hotel and Casino in Las Vegas and the Fairmont Sonoma Mission Inn in Sonoma, Calif., have all begun to offer incentives to local residents like reduced admission fees or discounts on treatments.

While this strategy may help spas circumvent the challenge of reduced hotel occupancy, it can have undesired effects for business travelers who may find the spa overcrowded or unable to accommodate them. Hotels say they have been trying to avoid spa logjams by being more proactive, contacting guests ahead of time if they anticipate a large volume of local visitors and asking them to book spa treatments in advance.

The hotel spas are also shifting toward shorter, less expensive treatments. Ms. McNees, of the spa association, said that many spas offered quicker or cheaper treatments in the past, but now they are marketing them more aggressively.

“Right now, I think where the spas are focused is trying to maintain the customer visits,” said Jeremy McCarthy, director of spa operations for Starwood Hotels & Resorts. “The spas are trying to see if they can touch as many people as they normally would.” Even if hotel guests spend less per visit, more visitors would help make up the difference.

“What our members have been reporting is there are more people walking in the spa door,” said Ms. McNees of the spa association. “We’re capturing more guests, but when they’re there, they’re spending less.”

Hotels also are trying to increase spa revenue by offering packages in which several services are bundled at a discount, throwing in bonuses like a complimentary manicure when a more expensive service is booked, and issuing credits that guests can use for treatments during their stay.

“We’re seeing a lot of instances of spa packages being used as a way to incentivize guests,” said Bruce Baltin, senior vice president at PKF Consulting, a company that focuses on the hospitality and tourism industries. Mr. Baltin said these kinds of promotions served two purposes. They bring revenue into the spa and they increase bookings of guest rooms without forcing the hotel to lower room rates substantially.

Jane Angelich, an entrepreneur in Marin County, Calif., says she recently received spa vouchers as rewards when booking rooms for business trips, both domestically and overseas. But at one hotel, the credit went unused when she could not find an appealing treatment for an amount close to the voucher’s $100 price tag.

“You really can’t get much of anything in the way of treatments for $100,” she said. “It gets you in the door and using some service where you pay the difference. Of course, the hope is that you will buy products or go back for additional services.”

Spa packages appear to be catching on, though. At the St. Regis Resort, Monarch Beach, in Dana Point, Calif., a discounted massage and facial that was heavily promoted via the social networking site Facebook has been extended twice due to demand.

“Business travelers are traveling more economically but at the same time you also have, I think, because of the fact that they’re feeling more stress, a lot more people recognizing the importance of taking care of yourself,” said Mr. McCarthy of Starwood.

Still, if hotel spas are having difficulty attracting business, travelers may notice more equipment sidelined or out of order for extended periods as properties buy lower-end items that break down more easily and cut back on maintenance to save money, said Kurt Broadhag, president of K Allan Consulting. Mr. Broadhag’s firm focuses on fitness facilities, which are often combined with spas at hotels.

Joe Sokohl says he thinks he has already experienced the down side. As a software designer for PracticeWorks, a company that manufactures dental technology, Mr. Sokohl goes to hotel spas when traveling. In recent weeks, Mr. Sokohl said, he visited two hotels with broken whirlpools that remained out of service for the duration of his stay.

“The problem is from an experience standpoint, it makes a negative experience,” he said. He said he even stopped booking a hotel he previously had used frequently in the past when the whirlpool was down for six weeks. He switched to a competing property nearby. “The new hotel was the same rate. The fact that they had an indoor pool and a whirlpool that worked made enough of a difference.”

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Building Spa Revenue, Spa Business Plan, Spa Professionals, Spa Profits Build Spa Sales, Spa Resort Revenue

A New Soul
Some of the most valuable insights can come from painstaking decisions, as Nicole Cober Blake learned when she laid off her assistant at Soul Day Spa and Salon in Washington, D.C., at the beginning of the year. Faced with a stifled credit line and 2008 sales of $489,000, Blake decided to funnel the equivalent of her assistant’s salary, or about $35,000, back into the business.

Before the recession, Blake says she never felt the need to interact face-to-face with customers. But without her “right hand” to answer phones, check in guests and help run the day-to-day operations, Blake was now at the salon all day, every day. Little did she know how much she had been missed by her 10-employee staff and her customers.

“For whatever reason, we were missing a great deal of calls. Now I’m better able to monitor timeliness and quality of service,” says Blake, noting a 20 percent drop in customer complaints within a month of her daily presence. “I feel so much more connected to the business and I’m a lot happier, ironically, then I was before.” Revenues also rose 10 percent in January, compared with the same month last year.

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Spa Business, Spa Business Plan, Spa Employment Soul Day Spa & Salon Washington DC

Andover spa owner cited for practicing medicine without a license

The owner and operator of an Andover spa last week entered into a diversion agreement with the Kansas State Board of Healing Arts Board, following an investigation into whether she practiced medicine without a license.

Stacy Truesdell owns TA LLC, which does business as True Aesthetics Premier Laser and Medical Spa.

The board investigated allegations of instances occurring in October and November 2008. The board alleges Truesdell performed medical procedures without the supervision of a licensed practitioner of the healing arts and gave the impression she was appropriately trained and able to practice healing arts. Both are violations of Kansas law.

Procedures in the investigation included: Botox injections, laser hair removal treatments and laser surgery.

However, the board says it received no reports of any clients being injured as a result of the procedures performed.

The healing arts board says Truesdell cooperated fully with the inquiries, including providing documents in response to two administrative subpoenas and discussing the matter with board’s representatives.

Because of Truesdell’s corporation, the board agreed to forego any litigation as long as the terms of the agreement are met. The diversion agreement specifies:

• Truesdell will no longer perform Botox injections.

• TA LLC can’t employ anyone to perform Botox injections.

• Truesdell will no longer perform laser treatments.

• TA LLC will no longer employ anyone to perform laser treatments.

• Truesdell will cooperate with the board and its investigators concerning any subsequent investigations.

• TA, LLC will not use the term “medical” in any manner, including, signage and letterhead.

These stipulations, the board says, are subject to change should Truesdell become licensed.

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Botox, Day Spa, Kansas Spa, Spa Business, Spa Business Plan, Spa Legal Issues

Starting in the 1990s, you couldn’t swing a plush white towel without hit ting a client in a “day spa” that had once been known simply as a salon.

Spas picked up way more steam in the late 1990s and beyond, when treating herself to a facial, massage and manicure/pedicure (now simply known as a mani/pedi) was simply what a woman did.

People worked hard and soon seemed to consider pampering mandatory as a reward. Facials, once something you only got on vacation or on a cruise, became, for some, a monthly must.

Consider this: According to Ohio’s Board of Cosmetology, the number of licensed estheticians in Ohio (they are permitted to do facials, skin treatments and waxing) grew from 453 in 1998 to 3,204 in 2008, a jump of 607 percent.

But just as analysts expect 2009 to bring retail store closings, some local day-spa owners expect their industry to shake out as well, with smaller spas either closing or salons cutting back on the spa services they offer and going back to their bread-and-butter haircut and color services.

Reps from beauty-supply houses are telling their customers – salon owners – that their sales to salon/day spas are dipping, noticeably, especially for nonhair-related products.

Like many working women, Tara Templeman, an events planner who lives in South Euclid, is considering financial priorities.

“I consider the economy, and my spending, and there’s some shakiness,” she says. “I definitely still make the same number of haircut and brow-wax appointments, but I’ve cut back on facials, manis and pedis.”

Frank Alvarez, of the Markfrank salon chain, has been in the business for 50 years, so he knows something about economic ups and downs.

He remembers the days when the “spas” were Helen Milner on Cleveland’s Shaker Square and Dominic’s in Beachwood – places patronized by wealthier women – and considers the more recent past, when every corner seemed to have a day spa.

He predicts a shakeout this year.

“I’ll tell you, this is the first time I’ve really seen the beauty business affected,” says Alvarez, who, along with his family, owns the two Markfrank salons in eastern suburbs.

Hair salons have long been dubbed recession-proof. People, especially women, likely will always want to have their hair cut and usually colored, too.

But in the past couple of decades, beauty salons began offering facials, waxing, massages, body wraps/exfoliation, pedicures and manicures. They had to add space to provide most of these services, which didn’t have as quick a turnaround as a small haircut station.

That meant less income per square foot.

Yet “it was a big trend, and people didn’t want to be the last ones to get on the boat,” says John DiJulius, owner of four John Roberts salons, two of which also have spas (Mayfield Heights and Solon).

An explosion of spa additions ensued, with supply fueling more demand.

Consider Charles Scott Salon and Spa, with salon-day spa locations in Rocky River and Westlake. In 1996, the Rocky River location had -in addition to a staff of hairstylists – three estheticians, one massotherapist, four nail technicians, one electrologist and a spa manager, says owner Chaz Henline. Today, it’s got six estheticians, five massotherapists, eight nail technicians, the same electrologist and the spa manager.

Henline opened a Westlake location as a full-service salon in 1993. “We had one esthetician, three nail techs, no massotherapists and no spa manager,” he says.

That location also evolved into a day spa in 2004 and now employs four estheticians, four massotherapists and five nail techs.

Henline took the new kind of business seriously, building dedicated areas to create the sanctuary environment such services require.

One area in which spas likely won’t see a big drop is waxing. Until the 1990s, salons used to do a little brow and upper lip waxing, sure, but bikini waxes were an exotic oddity. Now, every spa will vouch for how that portion of their business has grown – which is why there are so many licensed estheticians in Ohio now.

Nicole Flesher, spa director at John Roberts, says: “Waxing has skyrocketed. The numbers continue to go up still, every year. People never used to get Brazilians, and now I might do six or eight a day – maybe 10 a day in summer.”

Kelli Hosso, spa manager for Charles Scott, concurs. “Body and face waxing is very steady. People are not willing to give that up,” she says.

Some spas are using creative means to try to head off dips in other services, including massages. Many businesses, such as Charles Scott and the Five Seasons day spa in Westlake, have created “massage clubs,” which give people discounts if they commit to several appointments.

Still, in dire times, people do cut back on things that aren’t necessities.

Plus, says Alvarez, “You have so many day spas now. The spa thing is overplayed, it’s saturated.”

Still, he and DiJulius say the spa/salon industry’s ace in the hole is the personal relationships people develop with their hairstylists – and estheticians, manicurists or massotherapists.

“So many things that used to provide human contact – going to the bank, or the video store – you can do online now,” says DiJulius. “We’re one of the last legal ways to pay someone to touch you – someone you trust.”

As Alvarez says, “You continue to give the best service you can, you’re nice to people.

“And you wait it out.”

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Spa, Spa Business, Spa Business Plan, Spa Professionals, Spa Profits

CityCenter Holdings, LLC, a joint venture between MGM MIRAGE and Infinity World Development Corp, announced certain scope changes related to The Harmon Hotel & Spa which include postponing the opening of the hotel to late 2010 and cancelling The Harmon residential condominium component.

CityCenter Holdings, LLC is currently developing a spectacular 67-acre vertical city on the Las Vegas Strip. The Harmon is just one component of the CityCenter complex. Once complete The Harmon Hotel & Spa will feature approximately 400 rooms and suites. The Harmon as developed would have had approximately 200 residential units, of which 88 are under contract to be sold. Purchasers will be entitled to receive refunds of their deposits, but will be given the opportunity to purchase units at the Residences at Mandarin Oriental Las Vegas, Vdara and Veer Towers. Construction at The Harmon will continue through completion of the structure and exterior, with interior fit out to be deferred.

With the cancellation of The Harmon residential component as well as other additional cost savings the company now anticipates total cost savings of approximately $600 million up from its previously stated $400 million. In addition, by postponing The Harmon Hotel by one year CityCenter will defer approximately $200 million in construction costs to complete the interior fit out of The Harmon.

“By cancelling The Harmon condominium component, we will be able to avoid the need for substantial redesign of The Harmon resulting from contractor construction errors,” said Robert Baldwin, President and CEO of CityCenter. “In taking these steps related to The Harmon we can remain focused on maximizing the operating performance of Aria, Mandarin, and Vdara to their desired levels.”

All other components of CityCenter remain on schedule for a December 2009 grand opening. Aria Resort & Casino is a dramatic soaring hotel tower designed by Pelli Clarke Pelli architects and is CityCenter’s centerpiece. The sophisticated, contemporary design will be demonstrably different from any building that has preceded it and will provide a rich variety of experiences at street level. The resort will feature approximately 4,000 rooms and suites, 150,000-square-foot casino, fine dining and world-class entertainment. The Mandarin Oriental Hotel & Residences will feature 400 hotel rooms and 227 residential units and will be managed by the Mandarin Oriental Hotel Group. Veer Towers will contain 670 residential units in two towers surrounded by the best retail, restaurants and entertainment. Vdara is a 1,495 hotel-condominium tower designed by Rafael Vinoly. Crystals retail and entertainment complex will offer approximately 76 outlets featuring high-end fashion, boutiques, dining and entertainment venues.

“The construction progress to date on this enormous project is nothing short of incredible,” said Mr. Baldwin. “Over the next 11 months we will begin energizing these architecturally beautiful buildings with the hiring of more than 12,000 individuals for this dynamic resort complex. Creating this many jobs will have a tremendous impact for both Las Vegas and the State of Nevada for many years to come.”

“We have full confidence in the long term future of the Las Vegas market and the success of CityCenter,” said Chris O’Donnell, Chief Executive Officer of Infinity World Development Corp. “This is an appropriate action in the current circumstances.”

In October 2008, CityCenter secured a $1.8 billion senior bank credit facility which can be increased to $3.0 billion. Both sponsors continue to actively pursue additional financing for the project.
“These scope changes received overwhelming support from our CityCenter bank group,” said Dan D’Arrigo, Executive Vice President and CFO of MGM MIRAGE. “CityCenter has two supportive sponsors who are fully committed to this project. We will continue to seek financing that is in the best interest of CityCenter as well as its sponsors.”

Las Vegas Spas, Spa Business, Spa Business Plan, Spa Opening

The Medical Spa World is dialing 9 1 1 Acara for MedSpa Resuscitation

As the economy worsens there is a growing number of Medical Spas losing money. Acara, is offering a complimentary webinar on January 27th focused on MedSpa business turnaround.

One of the main reasons I want to promote this program is that I see 70-80% of MedSpas that are in financial trouble wait until it is potentially too late for anyone to save their business

 

In order to execute a proper turnaround plan you need to invest money. There is the cost of professional fees, marketing expenses and from time-to-time operational costs (i.e. restaffing, etc). Acara’s MedSpa turnaround plans often include market re-positioning, website upgrades, staff re-engineering, sales training, management training, new service & product implementation.

 

It is too bad that oftentimes we receive 9 1 1 calls from businesses for help and it is too late. They have no working capital, collateral or credit remaining to invest the money into a turnaround plan.

 

 There has been an increase in the growing number of Medical Spas that continue to lose money, whether it is due to the economy or not, and many are reaching out to industry consultants with a 9 1 1 call looking to resuscitate their business.

Acara, with its extensive turnaround experience, has responded to this growing demand by developing a turnaround package available to Medical Spa’s nationwide.

The Acara team is well suited to identify the root of the problem and develop a turnaround plan. One of many examples include, Acara taking a medical spa from $25K per month up to $75K +.

“One of the main reasons I want to promote this program is that I see 70-80% of MedSpas that are in financial trouble wait until it is potentially too late for anyone to save their business,” states Francis X. Acunzo, Acara CEO and Turnaround Strategist. “In order to execute a proper turnaround plan you need to invest money. There is the cost of professional fees, marketing expenses and from time-to-time operational costs (i.e. restaffing, etc). Acara’s MedSpa turnaround plans often include market re-positioning, website upgrades, staff re-engineering, sales training, management training, new service & product implementation.”

Mr. Acunzo explains, “It is too bad that oftentimes we receive 9 1 1 calls from businesses for help and it is too late. They have no working capital, collateral or credit remaining to invest the money into a turnaround plan.”

Acara believes, that if you think you are in need of help don’t wait until it’s too late to resuscitate, do it now. A good start may be attending Acara’s upcoming Webinar, Dial Acara 9 1 1 for MedSpa Resuscitation being held on Tuesday, January 27th at 1:00 p.m. EDT and presented by Francis X. Acunzo.

About Acara Partners: 

Acara is the business team for the spa industry offering turnkey solutions to owners, operators, physicians and investors seeking to develop, manage and market their Spa, Medical Spa, Wellness Center, Cosmetic or Aesthetic Practice. Acara is led by industry leader Francis X. Acunzo and his team of expert consultants with over 25 years of spa, med spa and retail healthcare experience.

Medical Spa, Spa, Spa Business, Spa Business Plan, Spa Closings, Spa Training

U.S. spas, reeling from the sharp drop in consumer spending, are about to get a lifeline. Wynne Business Spa Consulting is introducing The Spa Director’s Recession Toolkit, a management seminar featuring tactics to rapidly improve their financial health. The seminars are being held February 9, 2009, in New York City, and on February 24, 2009 in the San Francisco Bay Area.

To survive the economic downturn, spas must reduce overhead expenses and costs while protecting the quality of the guest experience, and maximize every sales opportunity without “giving away the spa.” Seminar creator Peggy Wynne Borgman of Wynne Business Spa Consulting, herself a 25-year spa operator, believes with the right guidance, spas can rise to the challenge.

Spas face hidden dangers in cost-cutting, she says. For example, slashing operating hours to lower overhead may result in less convenience for clients, fewer sales and a bigger loss. Reactively laying off employees can have a chilling effect on morale – nd customer service. “If we panic and make the wrong decisions, we’ll lose clients,” notes Borgman. “We have to deliver more value, more convenience, and reposition spa-going as a healing activity- not a luxurious indulgence.”

The seminar helps spa directors create an integrated strategy for survival, while delivering business turnaround “tools” that can be put to use immediately. The curriculum addresses a wide array of issues, including the best way to communicate bad news to employees, revamping a spa’s marketing message to stay relevant to a consumer’s new pared-down lifestyle, creating compelling sales promotions without undermining the perceived value of the spa’s offerings, avoiding the dangers of discounting, and applying “lean” business practices to spa operations.

“Spas can reduce the cost of doing business without degrading their guest experience,” maintains Borgman. “For example, most spas hold far too much inventory, which doesn’t lead to bigger sales but ties up crucial operating cash. We show them how to streamline their retail offerings and even their service menus. We also discuss the most profitable way to reward employees for their performance and contribution.”

Spa Business, Spa Business Plan, Spa Profits

The beginning of a new year should be a time to wipe the slate clean and start anew. However, the 2009 U.S. economy can’t help but be saddled with the baggage of a weathered and worn 2008, a year that brought a new president, a recession, and a new focus on the impacts and woes of small businesses nationwide.

The vast majority of the 14,615 spas1 that make up the spa industry in the United States are owned by entrepreneurs, making it a vibrant segment of the U.S. small business community. Although this entrepreneurship is what makes the profession so unique and personal, it is also what is causing the industry to fall victim to the turmoil caused by the recent economic downturn and credit crunch.

According to the U.S. Small Business Administration’s Office of Advocacy, a small business is an independent business that employs fewer than 500 employees, and small businesses represent 99.7% of all employer firms in the country.2 (See Facts About Small Business.) Because of this enormous reach, small businesses may also be the ones hurt most during the recession. In fact, approximately 25,000 of the 157,000 jobs cut in October 2008 were from small businesses.3

There are two places a spa can be right now: on steady ground or in trouble. If your spa is in trouble, it is important to ask for help from experts in the industry to look at your numbers and find out why your business is being upset, says Lenny LaCour, partner, LH Connects in Glenview, Illinois, and spa industry expert. “It’s hard to do it yourself because you are so attached to your business. You need to set up a business plan, start from where you are and work yourself out of it,” he says. If you are on steady ground, stay the course and improve how you manage your spa by looking at things such as waste, marketing, client retention and customer service.

The spa industry

Although it is a widespread belief that things will get worse before they get better—especially for day spas—some spa owners, such as Monica Morrell-Dean, owner of Spa Morrell in Chattanooga, Tennessee, have yet to experience any hardship because of the current economic climate. “We are seeing a steady stream of clients this year, even more so in the third and fourth quarters, which is meeting or beating last year’s numbers,” she says. The five-year-old, 1,850-square-foot Spa Morrell employs 10 team members. “Our industry is recession-proof sometimes—women will always buy lipstick,” says Morrell, although she admits things might scale back a bit more than they currently have. “Those clients that come four or five times a year might come two or three times instead, and buy more retail products.”

Destination spas such as Cal-a-Vie, The Spa Havens, a 200-acre private health spa in Vista, California, that was recently named No. 1 Destination Spa in North America in Travel + Leisure’s World’s Best honors, may not feel the crunch at all. “We are a luxury destination spa, so our guests are in the upper economic strata, and I think people are cautious, but our type of environment is seen by guests as a necessity for de-stressing, relaxation and recreation,” says Debbie Zie, general manager of the property.

Many medical spas are not necessarily experiencing a huge lack of clients either, although they are seeing profits showing up in different areas than usual. Robin Bernens, RN, of Belladerm MedSpa in Maple Grove, Minnesota, admits that business is down a little, but she says it has affected the facility’s esthetic business more than its injectable business. “The injectable business is still growing—maybe the clients are trying to put off plastic surgery for a while,” she theorizes.

LaCour reinforces the idea that the bad times are far from over, saying, “Until the U.S. banking system stabilizes itself, which will probably be in two to three years, we have to ride the wave, which is the heaviest wave I’ve ever seen come on this country.” However, LaCour doesn’t think survival is impossible; it will, however, require a keen business sense and a thorough knowledge of your spa’s own history and trends to make it through. “If you look at your history as far as what has maintained your business to this point, it is easier to stabilize yourself,” he explains. In order to do that, spas need to go into survival mode … without appearing that way to clients.

Managing your business

Now may be a scary time to be a small business owner, but don’t panic because your survival often is based on how educated you are about your own business, says LaCour. “See where low and peak times occur during the week, month and year,” he says. “Know the profitability of each of your treatments. Look at what it’s costing you to do your laundry—maybe there’s a different way for it to be done. Examine your payroll—what are the benefits you are offering your employees? Sometimes it’s a team effort to get out of it.” This team effort is something that is in full force at Tamara Spa + Wellness in Farmington Hills, Michigan.

“Little by little, my team realizes that either we’re going to work together or it’s not going to work,” explains Tamara Friedman, owner, who has required staff members to pitch in with the laundry, help with cleaning and make other sacrifices. But because of her efforts, she has yet to impose any layoffs, unlike other businesses in her area. “When the country starts sneezing, Detroit has a cold immediately because the automotive industry affects everyone in this area. Four or five businesses around me have closed up after 15–20 years in business. It’s so scary,” she says.

But Friedman isn’t giving up. Instead, she is taking this time to provide more personalized attention to clients and cut out the excesses. “It’s time to recoup everything and start thinking and improving. My employees have more responsibility now. I told them that if they can’t change, we can’t be in business. You cannot run a business now like you did before,” she says. To keep hers on track, Friedman is analyzing her entire spa, minimizing expenses and looking more closely at the budget. She’s also refocusing on her customers. “First, clients get an intense consultation. We can offer more personalized attention to old and new clients because we have more time,” she explains.

And Michigan isn’t the only state in the union feeling the stress of the economy. The 10,000-square-foot Changes Salon and Spa in Walnut Creek, California, is making modifications in anticipation of a situation that promises to continue well into the new year. “Fortunately, we are running just a little above last year, but we are getting hardest hit in the spa right now, mostly in massage,” says Bonnie Waters, founder of the 24-year-old business that currently has 65 employees. “We’re not seeing many prebookings in esthetic rooms, especially for facials.”

Waters hasn’t survived in business for 24 years without knowing a thing or two about tightening her belt. “We all need to plan to hang tight for the next 9–12 months. We will batten down the hatches and focus on what we’ve been focusing on all these years, and create a value-added experience for clients,” she says. Changes just went through an expansion at the end of 2007 and beginning of 2008 that added to its amenity space. “It was nonrevenue-producing space, but we needed to do it for ourselves, so I don’t regret it, but of course the economy slowed down after we committed to spending that money,” explains Waters.

The business is currently retooling its budget and may have to scale down support staff. “In order to offer the experience we want for our clients, it takes a fair amount of support staff, but we will be looking to link those up accordingly. Based on our volume, we are putting set budgets on how much we want to spend on front desk and support staff,” explains Waters.

She also is trying to minimize waste for both environmental and cost reasons. On the salon side of Changes, there is a large glass container in the back where stylists are asked to dump unused color in order to show how much waste is taking place. Waters and her team are still trying to figure out a fun and energizing way to bring this idea to the spa side of the business.

Also, similar to Tamara Spa + Wellness, Changes is spending more time making the client experience something to remember. “We’re in an affluent area and we’ve always been busy. We’ve trained our staff to realize and appreciate clients, but a percentage of our team is a little complacent. At a recent State of the Company address, we told them to consider what they’ve been doing throughout the years in regard to client relations as training, and now it’s the real thing. Step up and make sure you’re doing it every time. I think our team gets it and, as a result, that’s why we’re still climbing a little bit in today’s economy—we aren’t taking it for granted,” Waters says.

Marketing maintenance

It is common knowledge that the worst thing a business can do when experiencing tough times is to cut the marketing budget … but some spas do it anyway. “If you’re going to cut something, that’s not a good place to start,” says Bernens. “You’ve got to keep your name out there in order for it to be recognized.” So instead of cutting your marketing entirely, consider refining it. “Don’t try and do anything like discounting to beat out the competition, because once you discount, it’s hard to come back from that,” advises LaCour. “The competitive edge is taking what has worked for you already and seeing what you can do to give added value to your services, such as the old gift-with-purchase. For example, if you’re doing a microdermabrasion series, add on a glycolic peel.”

Open houses are a great way to offer promotional services to new and existing clients, too. “We just had an open house that was huge success,” says Bernens. “It takes place once a year and clients come to get a discount on that night.” Friedman believes it’s important to organize a lot of activities around your spa. “People are looking for specials. We are planning a couple of open houses, offering free makeup applications for the holidays and hosting a Botox* party,” she says.

As important as the programs themselves is getting the word out, and Web-based resources, because of their low price, speed and ease-of-use, are quickly becoming the spa’s favored form of marketing during the economic downturn. According to Morrell-Dean, “I’ve been doing a lot more Internet marketing than radio and newspaper advertising, and I can’t imagine advertising any other way.” In fact, Spa Morrell does approximately 90% of its advertising through the Internet, using Constant Contact for e-mail blasts, SpaFinder, Merchant’s Circle and search engine optimization. “That’s been the best advertising for us thus far,” says Morrell-Dean.

The speed available by e-mail blast marketing is proving priceless because spas are doing more last-minute marketing than ever before. “We are sending e-mail campaigns to fill unbooked times, and we’re being specific about the availability—this technician, this time, this day,” says Waters. “That’s proving to be pretty beneficial.”

In order for marketing and advertising to have its desired effect, it is important to make sure it benefits clients as well as your business. A good way of doing this is understanding that clients are experiencing the stresses that come with a bad economy just as much, if not more, than you are. Because of this, it is crucial to consider the language you are using when conveying your message.

“We are using more empathetic verbiage in our marketing pieces,” says Bernens, and Morrell-Dean has found that a simple change from percentages to prices has made a difference, as well. “Typically, I’ll say I have 15% off and instead, I’m currently showing dollar amounts. I think people are more responsive to that. It eases the pain, allowing them to go to the spa and get pampered,” she says. In the end, the understanding that clients need a visit to the spa more than ever in these stressful times is what will lead to your business’ survival.

Clients are key

As always, clients and their satisfaction are the lifeblood of your spa’s business—economic downturn or not—and it is important to remember this moving forward. “Be frugal without your clients knowing you are,” advises LaCour. “You need to let them know that the spa industry benefits their health during these difficult times. If you make it a sanctuary they want to come back to, you’ll have a stable business.” LaCour believes that enticing new clients right now is a difficult task, but if you take care of your current clients, he notes, referrals will help add new names to your database.

In fact, taking care of current clients is the main focus of many spas looking to survive the economic crisis. “Treasure your old clients. Don’t assume because they are old clients that you don’t have to pamper them anymore,” says Friedman. “My clients have supported me for years, so now I’m going to support them. They’ve been clients when times are good, so I’m going to give discounts, special prices … you have to have the right approach. I need to show kindness to clients who have always sustained my business.” This case-by-case approach is exactly what clients expect from a small business and will endear your most loyal clients to you even more.

Consider enhancing the stress-relieving and wellness offerings available at your spa. “We’re going to add a nutritionist, acupuncturist and offer colonics. My clients are all stressed out and want wellness services as much as beauty treatments, so we are concentrating on this,” says Friedman. Cal-a-Vie is also recognizing the importance of wellness programs during this intense time. “We’ll be focusing more on inviting outside speakers who discuss wellness topics. I have a psychologist who is talking about weight loss and stress reduction, our own dietician is addressing how hormone and stress-related factors affect weight, and we will be discussing sleep therapy because people are having more difficulty getting a good night’s sleep,” says Zie.

Many spas are also adjusting their menus in order to account for how the economy is affecting their clients’ pocketbooks. Fusion Med Spa in Lake Worth, Florida, recently introduced its Beauty Basics Menu, which offers the parts of the procedures that address client concerns and removes the extras. Changes is also offering something similar with its mini services. “The way we position it, the services are less time, but they have the same quality technical service, high-quality products and offer access to amenities. We are trying to help people who are feeling the crunch more than others to enjoy their services without as much fluff,” explains Waters. All of the services at Changes include a foot soak that is being eliminated for the shorter massage, pedicure and express peel.

Even industry legend Lydia Sarfati is getting in on the act, introducing The Facial Bar Concept, which features shorter, express treatments to allow clients to experience more of the services offered at a spa. Clients sit upright and are draped with a cape, similar to a hair service, and receive a quick conditioning or deep pore cleansing facial treatment in 30 minutes.

Survival of the fittest

There is no minimizing the affect your attitude as a spa leader has on your team and your spa’s success. “Do not talk about the gloomy stuff and the problems—be very optimistic. If the owner has worries, the employees have worries. You need to be very positive; it will all pass,” says Friedman.

Both Morrell-Dean and Friedman see this as a time of survival of the fittest in the spa industry. “Times like this are necessary. It is times like this that the spas that just went into business to make money … you aren’t going to see them anymore,” says Friedman.

There is no sugar-coating it—2009 promises to be a challenging year for small businesses. But by actively educating yourself about your business, exceeding your clients’ needs and expectations, and maintaining a positive attitude, your spa will survive to see a brighter day.

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Building a spa, Spa Business, Spa Business Plan